John Wood Group PLC is to sell its nuclear business to a subsidiary of Jacobs for a cash consideration of £250 million (around $305 million) representing a multiple of approximately 12.4x based on 2018 EBITDA of £20.2 million ($26.3 million).
Closing is conditional upon, among other things, obtaining anti-trust clearance from the Competition and Markets Authority (“CMA”) and is currently anticipated before the end of Q1 2020. Both parties have agreed that Jacobs will pay a fee of £7.5 million (over $9 million) to Wood in certain circumstances where the transaction is not cleared by the CMA. The cash proceeds from the divestment will be used to reduce debt and will enable Wood to take a significant step towards achieving its target leverage policy.
David Kemp, Wood’s Chief Financial Officer, said: “The sale of our nuclear business follows other recent divestments and marks a significant step towards achieving Wood’s target leverage policy. Although our nuclear business is a strong UK player and has performed well, we see better opportunities to develop clear global leadership positions across other parts of our business.”
The Wood nuclear business designs, delivers and maintains strategic and complex nuclear assets for customers primarily in the UK. In 2018, the profit before tax for the year amounted to $14.2 million and gross assets at year-end amounted to $464 million.